N.C.E.R.T QUESTION”S
(Q1) What is the difference between planned and unplanned inventory accumulation? Write down the relation between change in inventories and value added of a firm. Ans: Change in inventory = Value added + I.C - Sales
(Q2) Write down the three identities of calculating the GDP of a country by the three methods. Also briefly explain why each of these should give us the same value of GDP.
(Q3) Suppose the GDP at market price of a country in a particular year was Rs.1,100 crores. Net Factor Income from Abroad was Rs.100 crores. The value of IT – Subsidies was Rs.150 crores and National Income was Rs.850 crores. Calculate the aggregate value of depreciation.
Ans: 200 cr.
(Q4) Net National Product at Factor Cost of a particular country in a year is Rs.1,900 crores. There are no interest payments made by the households to the firms/government, or by the firms/government to the households. The Personal Disposable Income of the households is Rs.1,200 crores. The personal income taxes paid by them is Rs.600 crores and the value of retained earnings of the firms and government is valued at Rs.200 crores. What is the value of transfer payments made by the government and firms to the households ?
Ans: 100 cr.
(Q5) In a single day Raju, the barber, collects Rs.500 from haircuts; over this day, his equipment depreciates in value by Rs.50. Of the remaining Rs.450, Raju pays sales tax worth Rs.30, takes home Rs.200 and retains Rs.220 for improvement and buying of new equipment. He further pays Rs.20 as income tax from his income. Based on this information, complete Raju’s contribution to the following measures of income
(a) GDP
(b) NNP at market price
(c) NNP at factor cost
(d) Personal income
(e) Personal disposable income.
Ans: rs.500,450,420,200,180
(Q6) Write down some of the limitations of using GDP as an index of welfare of a country.
(Q7) Give reasons for not including leisure in GNP ?
(Q8) Which of goods - intermediate goods or final goods are taken in estimation of national income and Why ?
(Q9) Distinguish between consumption of fixed capital and capital loss ? Why does an enterprise make provision for depreciation ?
(Q10) If domestic income is 200 cr and national income 190 cr . Find NFYA ?
Ans: -10
(Q11) How is income generated in Production Process ? or How the sum of net value added is equal to factor payment ?
(Q12) Explain components of Domestic factor income ?
(Q13) If person ‘A’ sells scooter to person ‘B’ through commission agent ‘C’.How these will effect N.Y ?
C.B.S.E 2008 & Previous
(Q1) Giving reasons, explain how the following are treated in estimating national income: (6M)
(i) Wheat grown by a farmer but used entirely for family’s consumption.
(ii) Earnings of the shareholders from the sale of shares.
(iii) Expenditure by government on providing free education
Ans: Yes , No , Yes
(Q2) Are the following a part of a country’s ‘net domestic product at market price’ ? Explain.
(i) Net indirect taxes
(ii) Net exports
(iii) Net factor income from abroad
(iv) Consumption of fixed capital.
Ans: Yes , Yes , No , No
(Q3) Giving reasons explain how the following are treated while estimating national income :
(i) Payment of fees to a lawyer engaged by a firm;
(ii) Rent free house to an employee by an employer;
(iii) Purchases by foreign tourists.
Ans: No , Yes ,Yes
(Q4) Giving reasons, state whether the following are included in national income :
(i) Transport expenses by a firm. (ii) Expenditure on construction of a house.
(iii) Gift received from employer (iv) Purchase of a machine by a factory
(v) Salary received by an Indian resident working in US embassy in New Delhi.
(vi) Interest paid on loan taken to buy a personal car.
Ans: No, Yes, No, Yes, Yes, No
(Q5) Will the following be a part of domestic factor income of India ? Give reasons
(i) Old age pension given by the government.
(ii) Factor income from abroad.
(iii) Salaries to Indian residents working in Russian Embassy in India.
(iv) Profits earned by a company in India, which is owned by a non-resident.
Ans: No, No , No, Yes
(Q6) Will the following be included in the national income of a country ? Give reasons
(i) School fees paid by students.
(ii) Purchase of new shares of a domestic firm.
(iii) Gifts received from abroad.
(iv) Furniture purchased by households.
Ans: Yes, No, No, Yes
C.B.S.E 2009
(Q1) Give the meaning of factor income to abroad and factor income from abroad. Also give an example of each.
(Q2) Distinguish between domestic product and national product. When can domestic product be more than national product ?
(Q3) While estimating national income, how will you treat the following ?
(i) Imputed rent of self occupied houses.
(ii) Interest received on debentures.
(iii) Financial help received by flood victims
(iv) Capital gain on sale of a house
(v) Prize won in a lottery
(vi) Interest on public debt
Ans: Yes, Yes , No, No, No , No
(Q4) How to treat the following while estimating domestic factor income of India with reasons
(i) Remittances from non-resident Indians to their families in India.
(ii) Rent paid by the embassy of Japan in India to a resident Indian.
(iii) Profits earned by branches of foreign bank in India.
Ans: No , No, Yes
(Q5) How will you treat the following while estimating national income of India ? Give reasons for your answer. (Set 2)
(i) Salaries received by Indian residents working in Russian Embassy in India.
(ii) Profits earned by an Indian bank from its branches abroad.
(iii) Entertainment tax received by the government.
Ans: Yes , No, No
(Q6) How will you treat the following while estimating national income of India ? Give reasons for your answer. (Set 3)
(i) Salaries paid to Russians working in Indian Embassy in Russia.
(ii) Profits earned by an Indian company from its branch in Singapore.
(iii) Capital gains to Indian residents from sale of shares of a foreign company.
Ans: No , Yes, No
(Q7) From the following data, calculate “national income” by
(a) income method and
(b) expenditure method : (Rs. in crores)
(i) Interest 150
(ii) Rent 250
(iii) Government final consumption Expenditure 600
(iv) Private final consumption expenditure 1200
(v) Profits 640
(vi) Compensation of employees 1000
(vii) Net factor income to abroad 30
(viii) Net indirect taxes 60
(ix) Net exports (-) 40
(x) Consumption of fixed capital 50
(xi) Net domestic capital formation 340
(Ans 2010 , 2010 cr)
SAMPLE PAPER + C.B.S.E 2010
(Q1) Distinguish between real and nominal gross domestic product. (3M)
(Q2) Giving reason, classify the following into intermediate and final goods : (3M)
(i) Machines purchased by dealer of machines.
(ii) A car purchased by a household.
Ans: Intermediate , Final
(Q3) Give the meaning of Nominal GDP and Real GDP. Which of these is the indicator of economic welfare? (3M)
(Q4) ‘Machine’ purchased is always a final good.’ Do you agree? Give reasons for your answer.
Ans: No
(Q5) How will you treat the following whil estimating national income of India ? (6M)(i) Dividend received by a foreigner from investment in share of an Indian company.
(ii) Profits enarned by a branceh of an Indian bank in Canada.
(iii) Scholarship given to Indain students studying in India by a foreign company.
Ans: Yes , Yes ,No
(Q6) State whether the following statements are true or false. Give reasons for your answer:
(a) Capital formation is a flow.
(b) Bread is always a consumer good.
(c) Nominal GDP can never be less than Real GDP.
(d) Gross domestic capital formation is always greater than gross fixed capital formation.
Ans: T , F , F , F
(Q7) Giving reasons, state whether the following statements are true or false.
(i) Real gross domestic product can be equal to nominal gross domestic product.
(ii) Savings are a stock.
(iii) Butter is only a final product.
Ans: T , F , F
(Q8) Explain the problem of double counting in estimating national income, with the help of an example. Also explain two alternative ways of avoiding the problem. (6M)
(Q9) How will you treat the following while estimating national income of India :
(a) Dividend received by an Indian from his investment in shares of a foreign company;
(b) Money received by a family in India from relatives working abroad;
(c) Interest received on loans given to a friend for purchasing a car.
Ans: No, No , No
(Q10) Calculate gross fixed capital formation from the following data: (3M)
Rs. crores
(i) Private final consumption expenditure 1,000
(ii) Government final consumption expenditure 500
(iii) Net exports (-) 50
(iv) Net factor income from abroad 20
(v) Gross domestic product at market price 2,500
(vi) Opening stock 300
(vii) Closing stock 200
Ans: 1150 crore
(Q11) Calculate (a) Gross domestic product at market price, and (b) Factor income form abroad from the following data : (Rs. in crores) (6M)
(i) Profits 500
(ii) Exports 40
(iii) Compensation of employees 1,500
(iv) Gross national product at factor cost 2,800
(v) Net current transfers from rest of the world 90
(vi) Rent 300
(vii) Interest 400
(viii) Factor income to abroad 120
(ix) Net indirect taxes 250
(x) Net domestic capital formation 650
(xi) Gross fixed capital formation 700
(xii) Change in stock 50
(Ans 3050 , 120)
(Q12) From the following data calculate,
(a) Gross domestic product at market price, and
(b) Factor income to abroad :
(Rs. in crores)
(i) Compensation of employees 1,000
(ii) Net exports (-) 50
(iii) Profits 400
(iv) Interest 250
(v) Rent 150
(vi) Gross national product at factor cost 1,850
(vii) Gross domestic capital formation 220
(viii) Net fixed capital formation 150
(ix) Change in stock 20
(x) Factor income from abroad 30
(xi) Net indirect taxes 100
( Ans 1950 , 30 )
(Q13) From the following data calculate
(a) Gross domestic product at market price, and
(b) Factor income from abroad :
(Rs. in crores)
(i) Gross national product at factor cost 6,150
(ii) Net exports (-) 50
(iii) Compensation of employees 3,000
(iv) Rent 800
(v) Interest 900
(vi) Profit 1,300
(vii) Net indirect taxes 300
(viii) Net domestic capital formation 800
(ix) Gross fixed capital formation 850
(x) Change in stock 50
(xi) Dividend 300
(xii) Factor income to abroad 80
( Ans 6400 cr , 130 cr )
C.B.S.E 2011
(Q1) Define ‘depreciation’. (1 mark)
(Q2) Explain how ‘non-monetary exchanges’ are a limitation in taking gross domestic product as an index of welfare. (3 marks)
(Q3) Explain the treatment assigned to the following while estimating national income :
(i) Family members working free on the farm owned by the family.
(ii) Payment of interest on borrowings by general government.
Ans: Yes , Yes
(Q4) Giving reasons, explain the treatment while estimating national income : (2 each)(i) Social security contributions by employees.
(ii) Pension paid after retirement.
(iii) Expenditure on maintenance of a building.
(iv) Expenditure on adding a floor to the building.
Ans: No , Yes , No , Yes
(Q5) Giving reasons classify the following into intermediate products and final products :
(i) Furniture purchased by a school.
(ii) Chalks, dusters, etc. purchased by a school.
(iii) Computers installed in an office.
(iv) Mobile sets purchased by a mobile dealer.
Ans: Final , IC , Final , Inter
C.B.S.E 2012
(Q1) Define consumption goods. (1 mark)
(Q2) Giving reason, explain how should the following be treated while estimating NY
(a) Expenditure on free services provided by government
(b) Payment of interest by a government firm.\
(c) Expenditure on education of children by a family.
(d) Payment of electricity bill by a school.
Ans: Yes , Yes , Yes , No
(Q3) Giving reason explain how should the following be treated in estimating national income:
(a) Expenditure on fertilizers by a farmer.
(b) Purchase of tractor by a farmer.
(c) Payment of bonus by a firm.
(d) Payment of interest on a loan taken by an employee from the employer.
(e) Interest paid by banks on deposits by individuals.
(f) National debt interest.
Ans: No , Yes , Yes , No ,Yes,No
(Q4) Should the following be treated as final expenditure or intermediate expenditure
(i) Purchase of furniture by a firm.
(ii) Expenditure on maintenance by a firm.
Ans: (i) Final (ii) Intermediate.
(Q5) How will you treat the following in the calculation of Gross Domestic Product of India ? Give reasons for your answer.
(i) Profits earned by a branch of foreign bank in India.
(ii) Salaries of Indian employees working in embassy of Japan in India.
(iii) Salary of residents of Japan working in Indian embassy in Japan.
Ans: Yes , No , Yes
(Q6) Find Gross Value Added at Factor Cost :
(i) Units of output sold 2,000
(ii) Price per unit of output (Rs.) 20
(iii) Depreciation (Rs.) 2,000
(iv) Change in stock (Rs.) (-) 500
(v) Intermediate costs (Rs.) 15,000
(vi) Subsidy (Rs.) 3,000
(Q7) Find Net Value Added at Market Price : (3 marks)
(i) Depreciation (Rs.) 700
(ii) Output sold (units) 900
(iii) Price per unit of output (Rs.) 40
(iv) Closing stock (Rs.) 1,000
(v) Opening stock (Rs.) 800
(vi) Sales Tax (Rs.) 3000
(vii) Intermediate cost (Rs.) 20,000
(Q8) Find out Net Value Added at Factor Cost : (3 marks)
(i) Price per unit of output (Rs.) 25
(ii) Output sold (units) 1,000
(iii) Excise duty (Rs.) 5,000
(iv) Depreciation (Rs.) 1,000
(v) Change in stocks (Rs.) (-) 500
(vi) Intermediate costs (Rs.) 7,000
(Q9) Find out Net National Product at Market Price and
Rs. crore
(i) Undistributed profits 20
(ii) Compensation of employees 800
(iii) Rent 300
(iv) Dividend 100
(v) Royalty 40
(vi) Net current transfers to abroad (-) 30
(vii) Corporation tax 50
(viii) Interest 400
(ix) Depreciation 70
(x) Net factor income from abroad (-) 10
(xi) Net indirect tax 60
Ans: (Q6) 27,500 , (Q7) 15500 , (Q8) 11500 , (Q9) 1760
C.B.S.E 2013
(Q1) Give two examples of intermediate goods. (1 M)
Ans:
(a) Raw material purchased for use in a factory
(b) Machine purchased for resale etc. (any two) ½×2
(Q2) Distinguish between “real” gross domestic product and “nominal” gross domestic product. Which of these is a better index of welfare of the people and why ? (4 M)
Ans: When domestic product is valued at current prices it is called nominal domestic product and when it is valued at base year prices it is called real domestic product.
Real domestic product is a better index of welfare of the people because it indicates the change in quantity of goods It is the value of final products produced within the domestic territory of a country during a year.
(Q3) Calculate ‘Sales’ from the following data : (Rs. in lakhs) (4M)
(i) Subsidies 200
(ii) Opening stock 100
(iii) Closing stock 600
(iv) Intermediate consumption 3,000
(v) Consumption of fixed capital 700
(vi) Profit 750
(vii) Net value added at factor cost 2,000
(Q4) Calculate ‘Sales’ from the following data : (Rs. in lakhs) (4M)
(i) Net value added at factor cost 560
(ii) Depreciation ock 60
(iii) Change in stock (-) 30
(iv) Intermediate cost 1,000
(v) Export 200
(vi) Indirect taxes 60
(Q5) Calculate “Gross National Product at Market Price” from the following data : (6 M)
(Rs. in crores)
(i) Compensation of employees 2,000
(ii) Interest 500
(iii) Rent 700
(iv) Profits 800
(v) Employer’s contribution to social security schemes 200
(vi) Dividends 300
(vii) Consumption of fixed capital 100
(viii) Net indirect taxes 250
(ix) Net exports 70
(x) Net factor income to abroad 150
(xi) Mixed income of self-employed 1,500
Ans: (Q3) 5000 , (Q4) 1710 , (Q5) 5700
(Q1) What are externalities ? Give an example of a positive externality and its impact on welfare of the people.
Ans: Externalities refer to the benefits (or harms) a firm or an individual causes to another for which it is not paid (or penalised) (1)
Ex. : Use of public parks by the people for pleasure for which no payments are made by the public (or any other example). It increases welfare through positive effect on health. (2)
(Q2) What are externalities ? Give an example of a Negative externality and its impact on welfare of the people.
Ans: same
Example : Polluting river by an oil refinery (Or any other relevant example.)
Impact : Reduces welfare through negative effect on health
(Q3) What are non-monetary exchanges ? Give an example . Explain the impact on use of GDP as an index of welfare of the people ?
Ans: It refers to the goods and services produced but not exchanged through money like the domestic services rendered by family memebers to each other .
These are difficult to estmate and so it escapes national income estimation .
These exchanges however have positive effect on the welfare of the people
(Q4) How should the following be treated in estimating national income of a country, give reason
(a) Taking care of aged parents
(b) Payment of corporate tax
(c) Expenditure on providing police services by the government.
Ans:
(a) Should be included because it is a productive service rendered to the parents.
(b) should not be included because any tax payment is a transfer payment as no good or service is provided in return
(c) should be included because expenditure on any free service provided by govt. is government’s finalconsumption expenditure. (No marks if the reason is not given)
(Q5) Giving reasons explain how the following are treated while estimating national income :
(i) Payment of fees to a lawyer engaged by a firm;
(ii) Rent free house to an employee by an employer;
(iii) addition to stock during year
(iv) Purchase of taxi by taxi driver
Ans: No , Yes, Yes , Yes
(Q6) How should the following be treated in estimating national income ? Give reason :
(i) Free medical facilities to employees.
(ii) Pension to senior citizens.
(iii) Interest payment by a government owned firm.
(iv) Exp. by a firm on payment of fees to a chartered accountant
(v) Payment of corporate tax by firm
(vi) Purchase of regrigerator by a firm for own use
Ans: Yes, No , Yes , No , No ,Yes
(Q7) Explain the difference between final good and intermediate good. Give one example of each.
(Q8) Find Net Value Added at Factor Cost :(Rs. in Lakh) (3 marks)
(i) Sales 100
(ii) Closing Stock 20
(iii) Excise 15
(iv) Opening Stock 10
(v) Depreciation 12
(vi) Intermediate Consumption 50
Ans: Rs. 33 Lakh
(Q9) Calculate ‘National Income’ and ‘Net National Disposable Income’ from the following :
(Rs. in Arab)
(i) Net change in stocks 50
(ii) Government final consumption expenditure 100
(iii) Net current transfers to abroad 30
(iv) Gross domestic fixed capital formation 200
(v) Private final consumption expenditure 500
(vi) Net imports 40
(vii) Depreciation 70
(viii) Net factor income to abroad (-) 10
(ix) Net indirect tax 120
(x) Net capital transfers to abroad 20
Ans: 630
34 docs|4 tests
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1. What is national income accounting? |
2. What are the related concepts in national income accounting? |
3. How is national income measured in commerce? |
4. What is the significance of national income accounting? |
5. What is the trend in national income from 2008 to 2013? |
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